APPEAL from a judgment of the Supreme Court in favor of plaintiff, entered October 28, 1953, in Onondaga County upon a verdict directed by the court at a Trial Term (KINGSLEY, J.).
Gustav P. Blaustein for appellant.
M. Harold Dwyer for respondent.
MCCURN, P. J.
The defendant insurance company issued to the plaintiff its policy of insurance known as a Schedule Manufacturers' and Contractors' General Liability policy. This action is brought to recover the amount expended by the plaintiff in settlement of two actions brought against the plaintiff for personal injuries based upon negligence and for attorney's fees necessarily incurred in the defense and settlement of said actions. The defendant refused to assume responsibility under its policy or to defend the actions upon the ground that such causes of action did not come within the coverage of the policy. The appeal is from a judgment entered upon a directed verdict in favor of the plaintiff.
The plaintiff entered into a contract with the owner of the Community Grill in Cortland, New York, to sell and to install in the premises of the Community Grill a Carrier Condensing unit. Plaintiff's employees commenced and completed the installation on September 21, 1949. On May 15, 1950, one Arnold Wood, a plumber, was installing a gas heater in the basement of the Community Grill, and at the same time one Fred Harris, an employee of a junk dealer, was removing junk from the basement of the Community Grill, when he struck an old ammonia tank with a hammer or sledge. An explosion resulted, injuring both Harris and Wood and they brought the above-mentioned actions against this plaintiff to recover damages for their injuries. The complaints of both Harris and Wood charged negligence against this plaintiff in that plaintiff's employees disconnected the tank containing ammonia fumes, failed to empty it of such fumes, but left it in such condition that it was dangerous and hazardous to any persons thereafter having occasion to remove or otherwise deal with the tank.
The insurance policy contains a 'Definition of Hazards' among which are:
'Division 1--Premises--Operations. The ownership, maintenance or use of premises and all operations necessary or incidental thereto'.
'Division 3--Products * * * operations, if the accident occurs after such operations have been completed or abandoned at the place of occurrence thereof and away from premises owned, rented or controlled by the insured, except (a) pick-up
and delivery, (b) the existence of tools, uninstalled equipment and abandoned or unused materials and'.
The policy provides under 'Exclusions' 'This policy does not apply: * * * (e) under divisions 1 and 5 of the definition of Hazards, to liability with respect to which insurance is or can be afforded under division 3 of the Definition of Hazards'.
The insured paid a premium charge for coverage under Division 1--Premises-- Operations, but paid no premium charge and obtained no coverage under Division 3--Products. The policy therefore does not cover accidents occurring after operations have been completed or abandoned at the place of occurrence thereof and away from the insured's premises, except '(a) pick-up and delivery, (b) the existence of tools, uninstalled equipment and abandoned or unused materials'. It is plaintiff's contention here that the accident in question comes within the ...